Zambia seeks to empower kwacha

Zambia is considering reintroducing regulations to make the kwacha the country’s only legal tender, treasury official Fredson Yamba said on Wednesday.

The government of Africa’s second-largest copper producer has often blamed the weakening of its currency on the tendency of businesses to price their products in dollars, and it banned the practice in 2012, only to lift the restrictions again in March 2014.

This year the kwacha has shed more than 40 percent in value against the dollar due mainly to a sharp fall in global copper prices, severe electricity shortages and government mining regulations that spooked investors.

“The government is considering the re-introduction of currency regulations whose principle objective is to reinforce the kwacha as legal tender in the nation,” Yamba said in a statement.

The other objective of such a move would be to ensure effectiveness in the conduct of monetary policy, which is aimed at ensuring price stability, he said.